Manage Money

20 Easy Tips on Teaching Kids about Money

Teaching Kids about Money early instills good financial habits and knowledge and it is essential for their long-term financial well-being.

Financial literacy is an essential life skill that, when nurtured from a young age, can empower children to make informed and responsible financial decisions in the future. Teaching kids about money doesn’t have to be a complex or daunting task; in fact, it can be an engaging and enjoyable process for both parents and children. In this comprehensive guide, we will explore 20 easy and effective tips to help parents, guardians, and educators teach kids about money. From setting up allowances and savings accounts to introducing the concept of budgeting and the value of delayed gratification, these tips are designed to create a strong foundation for financial understanding in children. Whether your aim is to instill financial responsibility, encourage smart saving habits, or prepare kids for a financially savvy future, these insights will provide you with practical and age-appropriate techniques to make the learning process engaging and enjoyable. So, let’s embark on this educational journey and discover the 20 easy tips for teaching kids about money, setting them on the path to financial competence and independence.


1. Start Early

Starting early in teaching kids about money is crucial for their financial literacy and future financial success. By introducing basic money concepts and good financial habits from an early age, children can develop a strong foundation for making smart financial decisions.

  • Two examples of starting early in teaching kids about money include providing an allowance and encouraging savings. Providing children with a regular allowance allows them to learn the value of money and the concept of budgeting. It gives them the opportunity to make their own spending choices and understand the consequences of their financial decisions.
  • Encouraging savings by setting up a savings account or piggy bank helps children develop the habit of saving and understand the benefits of delayed gratification. It teaches them the importance of setting aside money for future goals and emergencies. By starting early and instilling these fundamental money concepts, children can grow up with a solid understanding of personal finance and develop healthy money management skills that will serve them well throughout their lives.

Begin teaching kids about money as early as possible to build a strong foundation for their financial literacy.


2. Use Everyday Opportunities

Using everyday opportunities to teach kids about money is an effective approach in fostering their financial literacy and understanding of personal finance. By incorporating money-related discussions and activities into their daily lives, children can develop practical money skills and learn important financial lessons.

  • Using everyday opportunities in teaching kids about money include involving them in grocery shopping and encouraging them to save for a specific item. Involving children in grocery shopping trips provides an opportunity to discuss budgeting, comparison shopping, and making informed purchasing decisions. Parents can discuss the cost of items, explain the importance of price comparisons, and involve children in deciding what to purchase within a set budget.
  • Encouraging children to save for a specific item they desire, such as a toy or game, teaches them the value of setting goals, patience, and saving money over time. Parents can help children calculate how much they need to save, set a savings timeline, and celebrate the achievement once the goal is reached. By utilizing everyday opportunities to teach kids about money, parents can create valuable learning experiences and empower children to make wise financial choices throughout their lives.

Utilize everyday situations like grocery shopping or budgeting for family activities to teach kids about money management.


3. Set an Example

Setting an example is a powerful way to teach kids about money and instill good financial habits. Children observe and learn from their parents’ behaviors and attitudes towards money, making it essential for parents to demonstrate responsible financial practices.

  • Teaching kids about money include practicing smart spending habits and saving regularly. By demonstrating wise spending habits, such as budgeting, prioritizing needs over wants, and making informed purchasing decisions, parents can show children the importance of being mindful with money. This can involve discussing family financial goals, involving children in decision-making processes, and explaining the reasoning behind certain spending choices.
  • Additionally, regular saving is another important behavior to model. Parents can openly discuss the family’s saving strategies, explain the purpose and benefits of saving, and involve children in setting aside money for specific goals or future needs. By setting an example of responsible financial behavior, parents can inspire and guide their children towards a healthy relationship with money and empower them to make sound financial decisions in their own lives.

Model good financial habits and behaviors yourself as children learn by observing their parents’ actions.


4. Allowance and Chores

Consider giving children an allowance tied to age-appropriate chores to teach them the value of earning money and financial responsibility. 

Allowance and chores can be effective tools in teaching kids about money and instilling a sense of responsibility and work ethic. Connecting money to chores helps children understand the connection between effort and reward, as well as the value of their time and skills.

  • Using allowance and chores in teaching kids about money include establishing a chore system and encouraging savings goals. By establishing a chore system, parents can assign age-appropriate tasks to their children and link them to a monetary reward
  • This helps children develop a sense of responsibility, accountability, and the understanding that money is earned through work. Parents can also set clear expectations and rewards for completing chores consistently and to a satisfactory standard.

By incorporating allowance and chores into the teaching of money, parents can instill valuable lessons about work, money management, and financial responsibility in their children.


5. Saving Jars

By utilizing saving jars, parents can provide hands-on experience in money management, financial goal-setting, and the development of wise spending habits for their children.

  • Saving jars are physical containers that children can use to allocate their money into different categories, such as saving, spending, and giving.
  • This allows children to visually see how much money they have in each category and make informed decisions about how to allocate their funds. It fosters a sense of responsibility, planning, and awareness of where their money is going. 

 This teaches them the importance of patience, delayed gratification, and achieving financial milestones.


6. Goal Setting

Goal setting is a fundamental aspect of teaching kids about money and cultivating their financial literacy. By setting clear goals, children can learn the importance of planning, discipline, and delayed gratification.

  • Incorporating goal setting in teaching kids about money include saving for a specific purchase and setting long-term financial goals. Saving for a specific purchase, such as a toy or gadget, allows children to experience the satisfaction of working towards and achieving a short-term goal. Parents can help their children set a realistic savings target, track progress, and celebrate the accomplishment once the goal is reached. This exercise teaches children the value of saving, budgeting, and making conscious choices with their money
  • Additionally, setting long-term financial goals, such as saving for higher education or a future investment, instills a sense of responsibility and a forward-thinking mindset. Parents can engage their children in discussions about long-term financial goals, help them understand the steps required to achieve those goals, and encourage regular savings towards them.

By incorporating goal setting into financial education, parents empower their children to develop a proactive and purposeful approach to managing their money and working towards their aspirations.


7. Money Discussions

Having open money discussions is a crucial aspect of teaching kids about money and fostering their financial literacy. Regularly engaging in conversations about money helps children develop a healthy understanding of financial concepts and attitudes towards money.

  • Involving children in family financial decisions and discussing money values. Involving children in family financial decisions, such as budgeting or major purchases, provides them with a real-world context to understand the practicalities of money management. Parents can explain their thought processes, involve children in decision-making discussions, and answer their questions about money-related matters. This promotes transparency, critical thinking, and financial awareness.
  • Discussing money values, such as the importance of saving, giving, and responsible spending, helps children develop a strong foundation for making ethical and responsible financial choices. Parents can have age-appropriate conversations about the value of money, the difference between needs and wants, and the significance of being mindful with finances. By fostering open money discussions, parents can empower their children to become financially responsible individuals with a strong understanding of money and its role in their lives.

Engage in age-appropriate conversations about money, explaining basic concepts like earning, spending, saving, and investing.


8. Budgeting Basics

Introduce the concept of budgeting by involving kids in creating a budget for family expenses or their own purchases. Teaching kids about budgeting basics is a fundamental step in their financial education journey. Budgeting helps children understand the concept of income, expenses, and making informed choices with their money.

  • Teaching budgeting basics in relation to money include creating a spending plan and tracking expenses. Creating a spending plan involves helping children allocate their money into different categories, such as saving, spending, and giving. Parents can provide a visual representation, such as a simple budgeting sheet or envelopes labeled with different categories, to help children see where their money is going and make conscious decisions about how to allocate it.
  • Tracking expenses involves keeping a record of money spent on various items or activities. Parents can encourage their children to track their purchases, either by using a notebook or a budgeting app, to understand where their money is being spent and identify areas where they can make adjustments. This practice helps children develop awareness of their financial habits, prioritize their spending, and make adjustments as needed.

By teaching kids budgeting basics, parents empower them to develop responsible money management skills that will benefit them throughout their lives.


9. Delayed Gratification

Teach children the value of delayed gratification by encouraging them to save for something they really want instead of instant impulse purchases.

  • Delayed gratification in relation to money include saving for a larger purchase and setting financial goals. Encouraging children to save for a larger purchase, such as a toy or gadget, teaches them the value of setting aside money over time instead of impulsively spending it. This experience demonstrates the rewards that come with delayed gratification and helps children understand that waiting and planning can lead to more satisfying outcomes.
  • Discussing the importance of consistent saving and long-term planning, children learn to prioritize their future financial well-being over immediate wants. This practice cultivates a sense of responsibility and helps children develop the habit of making thoughtful financial decisions.

By emphasizing delayed gratification, parents can equip their children with a valuable skill that can positively impact their financial choices and overall well-being throughout their lives.


10. Comparison Shopping

Involve kids in comparing prices and making informed purchasing decisions to develop their critical thinking skills. Teaching kids about comparison shopping is an important lesson in financial literacy that helps them become savvy consumers.

  • Comparison shopping involves evaluating different products or services to find the best value for money. By teaching children this skill, parents can instill the importance of making informed purchasing decisions and stretching their dollars.
  • Researching prices involves teaching children to compare prices of similar items across different retailers or online platforms. Parents can involve children in the process of finding the best deal by discussing factors like quality, features, and price.
  • Reading product reviews helps children understand the importance of gathering information and considering the experiences of others before making a purchase. Parents can encourage children to read reviews from reliable sources or even involve them in writing their own reviews after purchasing a product.

By incorporating comparison shopping into their financial education, parents equip children with the skills to evaluate options, make cost-conscious decisions, and develop a critical mindset when it comes to spending money.


11. Banking Basics

Teaching kids about banking basics is an essential component of their financial education. Understanding how banks work and the various banking services available can help children develop responsible money management habits.

  • Opening a savings account allows children to learn firsthand about the process of depositing money, tracking their balance, and the benefits of saving. Parents can take their children to a bank or credit union, explain the purpose of a savings account, and guide them through the steps of opening their own account.
  • Introducing the concept of interest helps children understand how their money can grow over time. Parents can explain how interest is earned on savings accounts and discuss the concept of compound interest, which encourages long-term saving habits.
  • Parents can involve children in monitoring their account statements and discussing the growth of their savings through interest.

By teaching banking basics, parents empower their children to become financially literate individuals who can navigate the banking system confidently and make informed decisions about their money.


12. Allow Mistakes

Let children make small financial mistakes and learn from them. It helps them develop resilience and better decision-making skills. Allowing mistakes is an important aspect of teaching kids about money and fostering their financial independence. 

  • Allowing mistakes in teaching kids about money include giving them control over a budget and allowing them to make purchasing decisions. Giving children control over a budget means providing them with a certain amount of money and allowing them to make decisions on how to spend or save it.
  • If they make a mistake, such as spending all their money too quickly, they can experience the consequences firsthand and learn the importance of budgeting and planning. Allowing children to make purchasing decisions on their own, within reasonable boundaries, also allows them to learn from their mistakes.
  • For example, if they buy a toy impulsively and later regret it, they can learn the importance of thoughtful spending and the value of considering their needs and wants before making a purchase. By allowing mistakes, parents provide a safe environment for children to learn and grow, teaching them resilience, responsibility, and the skills necessary for making informed financial decisions in the future.

Mistakes provide valuable learning opportunities and teach children the consequences of their financial decisions.


13. Charity and Giving

Encourage children to donate a portion of their money to a cause they care about, fostering a sense of empathy and generosity. Teaching kids about charity and giving is an essential aspect of their financial education and nurturing their sense of empathy and social responsibility. Instilling the value of giving back to others helps children develop a compassionate and generous mindset.

  • Teaching charity and giving in relation to money include encouraging children to donate a portion of their allowance and involving them in volunteer activities. Encouraging children to donate a portion of their allowance teaches them the importance of sharing their resources with those in need. Parents can discuss different charitable organizations or causes and allow their children to choose where to direct their donation.
  • Involving children in volunteer activities, such as participating in food drives or helping at local community centers, provides them with firsthand experiences of giving back and making a difference in their community.

Parents can engage children in discussions about the importance of helping others and the power of collective action. By teaching charity and giving, parents nurture their children’s empathy and encourage them to be thoughtful and compassionate individuals who positively contribute to society.


14. Money and Entrepreneurship

Inspire entrepreneurial skills by encouraging kids to start small businesses or participate in money-making ventures, such as a lemonade stand. Teaching kids about money and entrepreneurship is a valuable way to foster their financial literacy and entrepreneurial skills. Introducing the concepts of business, earning income, and financial independence at a young age can ignite their creativity and ambition.

  • Encouraging them to start a small business or engage in entrepreneurial activities and teaching them financial management within their business. Encouraging children to start a small business, such as a lemonade stand or a crafts store, provides them with firsthand experience in generating income, managing expenses, and understanding the value of their products or services.
  • This allows them to develop skills in budgeting, marketing, customer service, and problem-solving. Teaching financial management within their business involves guiding children in tracking their revenue, expenses, and profits. Parents can explain concepts like profit margins, reinvesting in the business, and saving for future goals. 

By teaching kids about money and entrepreneurship, parents empower them to explore their passions, develop important life skills, and cultivate a mindset of financial independence and creativity.


15. Online Safety

Teaching kids about online safety is crucial when it comes to their financial well-being and protecting their personal information. In today’s digital age, it’s important for children to understand the potential risks and how to navigate the online world responsibly.

  • Teaching online safety in relation to teaching kids about money include educating them about secure online transactions and promoting responsible social media usage. Educating children about secure online transactions involves teaching them about the importance of using secure websites when making online purchases.
  • Parents can explain the significance of looking for the padlock symbol or “https://” in the website address to ensure encrypted connections for safe transactions. It’s also important to teach them to keep their personal and financial information confidential, including passwords and account details. 

Parents can emphasize the importance of privacy settings, caution against oversharing personal details, and encourage children to think critically about the information they share online. By teaching kids about online safety, parents help them become responsible digital citizens, protect their financial information, and navigate the online world with confidence.


16. Investing Basics

Introduce basic investment concepts in an age-appropriate manner, teaching kids about the potential benefits, risks of investing and how to build credit the right way

  • Teaching kids about money include explaining the concept of compound interest and introducing them to the stock market. Explaining compound interest involves teaching children how their money can grow exponentially over time through the power of compounding. Parents can illustrate this concept by showing how even small regular contributions can accumulate significant wealth over long periods.
  • Introducing kids to the stock market can be done by explaining the concept of buying shares of companies and potentially earning returns on those investments. Parents can use age-appropriate resources, books, or games to introduce the stock market and help children understand the basic principles of investing in stocks. By teaching investing basics, parents equip children with the knowledge and mindset to make informed investment decisions, develop long-term financial goals, and build wealth over time.

Understanding the fundamentals of investing helps children develop a long-term perspective and a foundation for building financial security.


17. Financial Literacy Resources

Utilize books, online games, and educational resources specifically designed for teaching kids about money and finance.

Financial literacy resources play a vital role in teaching kids about money and equipping them with the necessary knowledge and skills for financial success. These resources provide valuable educational materials, activities, and tools that can make learning about personal finance engaging and accessible.

  • Use financial literacy resources for teaching kids about money include online platforms and interactive mobile applications. Online platforms dedicated to financial literacy for kids offer a wide range of resources such as educational articles, videos, interactive games, and downloadable worksheets. These platforms often present financial concepts in a fun and age-appropriate manner, making it easier for kids to grasp and apply the knowledge.
  • Interactive mobile applications designed for kids can also provide engaging financial lessons. These apps often feature interactive games, simulations, and quizzes that teach kids about budgeting, saving, and making smart financial decisions.

These resources not only make learning about money enjoyable for kids but also empower them with the foundational knowledge and skills needed for a lifetime of financial well-being.


18. Allow Kids to Make Decisions

Give children opportunities to make financial decisions within a controlled environment, allowing them to learn from their choices. Allowing kids to make financial decisions is an essential aspect of teaching them about money and fostering their financial independence. It empowers them to take ownership of their financial choices and learn from the consequences of their decisions.

  • Giving them a budget for purchasing their own clothes and toys and involving them in family financial discussions. Giving kids a budget for purchasing their own clothes and toys allows them to make decisions within the boundaries of their allocated funds.
  • They can learn the value of money, practice making choices based on their priorities, and experience the trade-offs involved in their spending decisions. Involving kids in family financial discussions, such as budgeting or planning for a vacation, enables them to understand the financial aspects of everyday life.

They can contribute ideas, learn about budget constraints, and participate in decision-making processes. This involvement helps them develop critical thinking skills and a sense of financial responsibility. By allowing kids to make decisions, parents promote their financial autonomy, encourage responsible money management, and prepare them for future financial independence.


19. Encourage Saving for the Future

Teach kids about the importance of long-term saving, such as for education or future goals, instilling a sense of financial responsibility. Encouraging kids to save for the future is an important lesson in teaching them about money management and building financial resilience. Instilling the habit of saving from an early age sets a strong foundation for their financial well-being.

  • Encouraging saving for the future in teaching kids about money include setting up a savings account and establishing savings goals. Setting up a savings account specifically for children helps them understand the concept of saving money in a safe and secure way. 
  • This experience helps children see their savings grow and instills a sense of financial responsibility. Establishing savings goals is another effective way to encourage saving for the future.

By encouraging saving for the future, parents empower kids to develop responsible saving habits, cultivate financial discipline, and understand the importance of setting financial goals for their long-term financial security.


20. Make it Fun

There is nothing more encouraging that learning in a fun and engaging environment. The best way to teach your kids about money it through lessons, chores or conversations that are tailor made for them.  Keeping the money concepts simple is best, as they will be easier to teach.

  • Resources: there are many resources now that can help you when it comes to teaching. From books, video games, board games or coming up with creative chores.

As the points stated above, it is best to select specific money topics you want to focus on, such as saving for gift. Whether is taking a percentage from the allowance, or doing extra chores to gain points towards that gift. The best way is to structure each activity according to the lesson.



By implementing these tips for teaching kids about money, you can help foster financial literacy, responsible money management, and smart decision-making skills from an early age. Remember to tailor the lessons to your child’s age and developmental stage, providing ongoing support and guidance. By equipping children with a solid foundation in financial education, you empower them to make informed choices and achieve long-term financial well-being.


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